Question

When funds are internally used, the cost is known as _____________.

• A. Explicit cost
• B. Implicit cost
• C. Marginal cost
• D. Fixed cost

Answer 1

The correct option is B Implicit cost

An implicit cost is any cost that has already occurred but not necessarily shown or reported as a separate expense. It represents an opportunity cost that arises when a company uses internal resources toward a project without any explicit compensation for the utilization of resources.